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Enrollment Hikes Won't Guarantee More State Aid in New N.C. Budget

Enrollment increases in North Carolina districts will no longer automatically lead to more state aid, according to a provision in the latest North Carolina K-12 budget that apparently went unnoticed by some lawmakers until after it was approved.

The News & Observer in Raleigh reports that the state legislature, in approving a budget for fiscal 2015, gave itself the option of whether to grant increases in aid to public schools if districts' average daily membership (ADM) increases. This means that districts will face much more uncertainty about how much money they'll be getting from the state until lawmakers actually pass their annual spending plans. That, in turn, impacts how many teachers and teachers assistants they'll be able to hire.  

Republican lawmakers, who control the legislature, justified the change by stating that enrollment growth has been lower than projections from the state in recent years. (By law, these estimates were then built into the state's basic education spending.) These legislators argue that when they subsequently reduce aid to districts to match actual enrollments, they are unfairly accused of cutting aid to districts when, in fact, they are merely adjusting spending to reflect more accurate statistics.

One legislator, however, House Speaker Paul Stam, a Republican, indicated that he was tired of criticisms concerning the state's school funding structure: "I have never seen so much squealing about getting more money."

But Democrats and the state education department and district leaders argue that the change will have a huge and potentially damaging impact and could easily lead to bigger class sizes because of its impact on hiring capability. 

Phillip Price, the chief financial officer for the education department, told the paper that funding for districts will now have to compete with other state budget priorities in a way it didn't before. He also called it the largest change to state school budgeting in his lifetime.

And the superintendent for Wake County schools, Jim Merrill, said the new state budget will leave districts hanging as they prepare their own budgets: "It's one more thumbscrew that very much limits our planning."

The North Carolina Public School Forum reported in December 2013, using figures from the fiscal 2012 budget, that the varying importance state aid has to overall K-12 spending can be attributed to disparities in local property tax bases:

NCPropertyWealth.PNG

What was the gap in local per-student spending between the 10 counties with the highest property wealth in the state and the 10 counties with the lowest property wealth using that year's statistics? The Public School Forum calculated that disparity as well:

NCLocalSpending.PNGInterestingly, the fiscal 2015 budget approved by lawmakers includes an additional $42 million to reduce class sizes specifically in kindergarten and 1st grade. The money would be earmarked for an additional 760 classroom positions. So any impact the elimination of automatic aid increases has could be felt less in classrooms with the youngest students. 

The budget also includes a boost of $282 million for teacher pay increases, as my colleague Stephen Sawchuk wrote earlier this week. 

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